Dirty Blood: The Fall of Theranos and a Warning to Silicon Valley

The field of medical biotechnology has reached unprecedented heights in recent years, with new surgical devices and laboratory equipment combatting diseases and improving human health. Yet, in this quest for profit, companies may take actions at the expense of the patients and consumers who rely on their products. Take Theranos Inc. for example, a company which at one point was valued at $18 billion but is now worth next to nothing. How did one of Silicon Valley’s most promising startups fall so far?
A private health technology company based in Palo Alto, California, Theranos was founded in 2003 by Elizabeth Holmes at the age of nineteen before she dropped out of Stanford University to focus on growing the business. Holmes founded Theranos with the vision of ushering in a new era of laboratory testing that would make it easier for people to receive accurate test results faster at a cheaper price.
The company offers a myriad of lab tests, testing for diseases ranging from cholesterol to cancer, with the benefit of only using a couple drops of blood without the use of a large needle. Theranos’ proprietary machine, known as Edison, has been said to process at least 70 different tests from just a small blood sample. However, controversy brewed when it was discovered that Theranos was not using their proprietary machines in laboratory accuracy tests.. In 2014, according to emails obtained by the Wall Street Journal, Theranos split their proficiency-testing samples into two groups, one with the Edison machines and the other with equipment from other lab companies. The data showed that the two sets of equipment produced different results when testing for Vitamin D, thyroid hormone levels, and prostate cancer.
The wheels came spinning off in January of 2016 when the Centers for Medicare and Medicaid Services declared that the company’s blood tests “pose immediate jeopardy to patient health and safety”. Later in June, the large pharmacy chain Walgreens ended its partnership with Theranos and removed their blood-collection devices from their stores. As a result, the company laid off 340 workers in their laboratories, signaling a new direction for Theranos toward selling their machines to other lab companies.
“As researchers and investigators, we have a commitment to reporting our findings with clarity and honesty,” said Dr. Philip Osdoby, a professor of developmental and molecular biology at Washington University in St. Louis. “Research, especially in clinical and biomedical settings, can have a direct impact on the health and safety of individuals, and therefore there is a greater responsibility present as well.”
Theranos tried to climb back into the lab-testing industry by appealing to the Food and Drug Administration to approve their miniLab machines for use in testing for the Zika virus back in 2016. However, they dropped their appeal after regulators found that the company neglected to include proper patient safeguards.
“Theranos is certainly eager to get back into business, but they need to be careful and patient,” said Dr. Osdoby. “As a company, they have a responsibility to their investors to develop new products, but it cannot come at the cost of patient safety.”
Many companies along with Theranos have to wrestle with the dilemma of profit and safety. A balance between the two goals is achievable, but it may not happen on its own. Regulation and independent monitors are necessary so that this equilibrium can manifest and produce a more advanced, healthier society. Silicon Valley and companies around the world must prioritize their consumers. Theranos is also a prime example for aspiring researchers and entrepreneurs, especially at research driven schools like Washington University. The next generation of corporate and clinical leaders must bring honesty and integrity to their fields. Only with those virtues in mind can business and research effectively work together.